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AS I SEE IT

Posted 1/05/16 (Tue)

By Neal A. ShipmanFarmer Editor

While the State of North Dakota is quick to dole out fines to oil companies that are responsible for spills of oil and saltwater in western North Dakota, state officials also seem too willing to roll back those fines. And one has to wonder just what is the real message that the State of North Dakota is sending to the oil industry when it comes to protecting the state’s natural resources.
A case in point is the recent indication from North Dakota regulators that the state is willing to reduce the record $2.4 million fine that it imposed on Summit Midstream Partners and its subsidiary, Meadowlark Midstream Co., for a three million gallon saltwater and oil spill from its pipeline near Williston.
The spill, which is the largest in the state’s history, was discovered in early January of 2015, but regulators believe the ruptured pipeline had been leaking unnoticed since early October of 2014. The saltwater and oil from the spill contaminated Blacktail Creek in Williams County and also flowed into the Little Muddy and Missouri rivers.
While the record fine made big headlines, last month’s announcement by the state Department of Mineral Resource that it was actively negotiating a settlement with Summit Midstream Partners isn’t settling all that well with the Williams County Commissioners.
Historically, the state regulators routinely settle on fines that are about 10 percent of the maximum penalty.
The state’s rationale for lowering the fine is their belief that it promotes cooperation with the oil industry, ensures proper cleanup and so that no similar violations occur.
But the Williams County Commissioners aren’t buying into that rationale a bit and are objecting to the state lowering the fine.
The Williams County Commissioners have a valid point. In an article in the Williston Herald, Williams County Commissioner Dan Kalil was quoted as saying, “I don’t know how to describe the state’s attitude toward spills. They have a penalty system in place and usually settle them for a small percentage of the penalty. As we all know, things have changed in the state. This is a moment in time when we need to re-examine that attitude, that leniency.”
Kalil, and Williams County, are right in saying that the alliance between the state and the oil and gas industry needs to be reconsidered.
While spills can, and do, happen in the oil industry, the companies need to be held responsible for not only the cleanup costs, but also the fines that the state imposes on them.
What is going to get the attention of an oil company more, a fine of $2.4 million? Or a fine of $240,000?
Oilfield companies operating in the state need to be held to the highest standards when it comes to protecting our natural resources. And when they fail to meet those standards, then they should pay the maximum penalty.
It’s that simple.